The Privatisation Commission (PC) has recommended privatisation of salt and coal mines projects of Pakistan Mineral Development Corporation (PMDC) as separate transactions, official sources told Business Recorder.
The Cabinet Committee on Privatisation (CCoP) has already approved privatisation of Lakhra Coal Mines (Sindh), Sor-Rang Coal Mines (Balochistan), Degari Coal Mines (Balochistan), Sarigh Coal Mines (Balochistan), Khewra Salt Mines (Punjab), Warcha Salt Mines (Punjab), Kalabagh Salt Mines (Punjab) and Jatta/Bahadur Khel/Karak Salt Quarries (NWFP).
The sale proceeds of these projects would be equally shared by the federation and the provinces concerned. The Privatisation Commission, in its fresh summary to the Council of Common Interests (CCI) has asked for implementation of its earlier decision regarding privatisation of PMDC''s salt and coal mines projects.
It has also been asked that mineral leases of each project be assigned by the PMDC in favour of the new owner in accordance with the provincial mineral concession rules of the respective provinces.
Sources said the CCI, in its decision of May 29, 1997, approved the privatisation of the PMDC, which is operating salt mines in Punjab and NWFP and coal mines in Sindh and Balochistan. The privatisation of a mineral project involves assignment of the mineral lease in addition to transfer of assets to the new owner.
In terms of Article 70 of the Constitution of 1973, solid minerals do not fall in the federal and concurrent list as set out in the fourth schedule to the Constitution and therefore, are deemed to be in the residuary list which falls in the exclusive legislative powers of the provinces. Hence, consent of the province concerned is essential for assigning it to the new owner.
The issue remained under discussion between the federation and the provinces concerned till 2004, when the provinces agreed to privatisation of PMDC projects on the condition that sale proceeds of privatisation be shared on 50:50 basis between the federation and the province concerned.
Accordingly, the Inter-Provincial Coordination Committee (IPCC), in its meeting on May 25, 2004, considered the proposal submitted by the Petroleum and Natural Resources Ministry, and decided that the PC should start the process of privatisation of PMDC projects with the condition of sharing of sale proceeds on 50:50 basis between the Centre and the province concerned.
The matter was placed before the Cabinet Committee on Privatisation (CCOP) on December 31, 2004, which approved privatisation of the PMDC salt and coal mines projects and also the 50:50 sharing ratio.
According to PC, keeping in view difficult and primitive mining conditions, complex issues of award of coal and salt raising contracts, the issue of registered miners and localised interest of various parties in the mines located in their area, the privatisation of the PMDC as an entity is not likely to attract international and ''big'' local investors.
On the other hand, the privatisation of individual mines separately is likely to result in good competition and may fetch a better price. Moreover, the Petroleum and Natural Resources Ministry is not in favour of privatising PMDC as a whole.
The IPCC and the CCoP had also approved privatisation of salt and coal mines projects instead of PMDC as a whole company, the sources quoted as saying in the summary to CCI.
Sources said the condition of enlisting properties in consultation with the provincial governments (with whom the proceeds are to be shared on 50:50 basis) has already been met.
They said the PC circulated summary to the provinces and the Petroleum Ministry for their comments. Provinces dispatched their comments on the proposal, but the Petroleum Ministry did not give any new suggestion. The new summary is likely to be considered by the ICC, in its next meeting, which is yet to be scheduled.
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